What Happens If You File Taxes Late In 2023?

June 12, 2023 Andrew AdolphAudits

What happens if you file taxes late? That’s a question I get a lot in my field and one I dealt with
constantly as a former CRA auditor. The good news plain and simple is

YOU’RE NOT DEAD IN THE WATER!

However, you should still file. In this blog, I’ll tell you why and how so you don’t get into trouble.

What Happens If You File Taxes Late: The CRA’s Perspective

I get it, life happens and sometimes you’re just not able to file on time. Lucky for you, the CRA
doesn’t care too much as long as you are forthcoming. From the CRA’s perspective, they just
want money. Essentially all you’ll have to do is file like normal and pay a late fee.
The penalty for being late is 5% plus 1% for each full month you are late up to 12 months.
Not bad but next time it’s better to pay on time if possible.

What Happens If You File Taxes And Want a Refund?

More good news. If you file and owe no taxes you’re still eligible to receive your refund. If you do
owe taxes however you will have to pay a penalty.
The worst case scenario and one that is likely to happen is if you file late there will be a delay
when it comes to receiving your refund.
If you’re not sure about what you can claim as a refund check out my blog here.

What Happens If You File Taxes Late and It’s Been More Than 12
Months

This is where It can get tricky. You’ll have to pay the 5% plus the additional 12% but that’s not
all.

Filing your taxes later than 12 months after the deadline could:

Eliminate Your Non-Deductible Expenses:

The expenses you may have been able to claim as tax-deductible might vanish because the
CRA has certain time limits on when you claim expenses. It all depends on what you’re trying to
claim. If you’re confused about what those limits are, feel free to reach out to me.

Lose Your Tax Refund:

The CRA has a statute of limitations for tax refunds and if you are late, it’s possible that all that
money could disappear.

Increase Scrutiny:

I know that this happens personally because I was a former auditor. If you don’t file taxes on
time once you’ll be under the microscope. Trust me, you don’t want to be in the CRA’s iron
sights.

It’s always the better option to file your taxes on time and to be prepared to provide supporting
documentation if requested by the CRA.

One important thing I want to note is that if the CRA doesn’t ask for something, don’t
give it to them.

What Happens If You File Taxes Late: The Bottom Line

I want to make this clear. Unless you’re Bernie Madoff, you’re not going to do any prison time
for being late on your taxes. However, it’s only hurting your wallet the longer and longer you
wait.
I know this is a lot to process and it can seem overwhelming, even to the point where you’re
procrastinating.

However, that’s why people like me exist.

If you want to make sure you claim as much of your tax deductibles and refunds as possible
give me a call, book a free consultation, check out my blog, or ping me on LinkedIn. I’m reachable, to say the least,
and would be more than happy to help you sort.

Andrew Adolph

Andrew Adolph is a CPA and former CRA auditor with 25 Years of experience. He helps businesses to not par any more in sales taxs than the law says they must and acts as an advocate for you if you are being audited, so you can fous on your business.